Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Paying user area
Try for free
Lockheed Martin Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Lockheed Martin Corp. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Profitability Ratios (Summary)
Lockheed Martin Corp., profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The profitability metrics exhibit varied performance over the five-year period. Generally, margins decreased from 2021 to 2024, followed by a partial recovery in 2025, while return ratios showed more significant fluctuations.
- Gross and Operating Profit Margins
- Both gross profit margin and operating profit margin demonstrate a declining trend from 2021 to 2024. Gross profit margin decreased from 13.52% in 2021 to 9.75% in 2024 before increasing slightly to 10.15% in 2025. A similar pattern is observed in the operating profit margin, falling from 13.61% to 9.87% and then rising to 10.30%. This suggests potential pressures on production costs or pricing strategies during the 2021-2024 timeframe, with a modest improvement in 2025.
- Net Profit Margin
- The net profit margin experienced a more pronounced decrease, moving from 9.42% in 2021 to a low of 7.51% in 2024. While it increased to 6.69% in 2025, it did not recover to levels seen in earlier years. This indicates that factors beyond gross and operating profitability, such as interest expense or taxes, may have contributed to the decline and limited the recovery.
- Return on Equity (ROE)
- Return on equity exhibited substantial volatility. It increased significantly from 57.62% in 2021 to 61.86% in 2022, peaked at 101.24% in 2023, then decreased to 84.26% in 2024 and further to 74.65% in 2025. This suggests significant changes in the company’s capital structure or net income impacting shareholder returns. The peak in 2023 warrants further investigation to understand the underlying drivers.
- Return on Assets (ROA)
- Return on assets followed a similar pattern to the profit margins, declining from 12.41% in 2021 to 9.59% in 2024, and then decreasing further to 8.38% in 2025. This indicates a decreasing efficiency in utilizing assets to generate profits. The decline mirrors the margin compression observed over the period.
Overall, the period demonstrates a weakening of profitability from 2021 to 2024, with a limited recovery in 2025. The return ratios, particularly ROE, show greater fluctuations, potentially linked to changes in equity and net income. Further analysis is recommended to determine the root causes of these trends and their implications for future performance.
Return on Sales
Return on Investment
Gross Profit Margin
Lockheed Martin Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited fluctuations over the five-year period. Initially, a decline was observed, followed by a period of relative stability and then a subsequent decrease before a modest recovery.
- Gross Profit Margin Trend
- The gross profit margin began at 13.52% in 2021. A decrease to 12.56% was recorded in 2022, followed by a minimal change to 12.55% in 2023. A more substantial decline occurred in 2024, with the margin falling to 9.75%. The most recent year, 2025, shows a partial recovery to 10.15%.
- Relationship to Sales
- Sales demonstrated an overall upward trend, increasing from US$67,044 million in 2021 to US$75,048 million in 2025. However, the gross profit margin did not consistently increase alongside sales. The decrease in margin in 2024, despite increased sales, suggests potential pressures on the cost of goods sold.
- Gross Profit Fluctuation
- Gross profit decreased from US$9,061 million in 2021 to US$8,287 million in 2022. It experienced a slight increase to US$8,479 million in 2023 before decreasing significantly to US$6,930 million in 2024. A recovery to US$7,619 million was noted in 2025, but it did not reach the levels observed in the earlier years of the period.
The divergence between sales growth and gross profit margin in 2024 warrants further investigation to understand the underlying factors impacting profitability. The modest recovery in 2025 suggests potential stabilization, but continued monitoring is recommended.
Operating Profit Margin
Lockheed Martin Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating profit margin = 100 × Operating profit ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited a generally declining trend over the five-year period, followed by a slight recovery in the most recent year. While operating profit fluctuated, sales demonstrated consistent growth. A closer examination reveals specific patterns in the relationship between these figures.
- Operating Profit Margin Trend
- The operating profit margin decreased from 13.61% in 2021 to 12.65% in 2022, representing an initial decline. This downward trend continued into 2023, with the margin reaching 12.59%. A more significant decrease was observed in 2024, falling to 9.87%. However, the margin experienced a partial recovery in 2025, increasing to 10.30%.
- Relationship between Operating Profit and Sales
- Sales increased from US$67,044 million in 2021 to US$75,048 million in 2025, indicating consistent revenue growth. Operating profit, however, did not follow the same trajectory. It decreased from US$9,123 million in 2021 to US$8,348 million in 2022, then increased slightly to US$8,507 million in 2023. A substantial decrease was noted in 2024, with operating profit falling to US$7,013 million, before recovering to US$7,731 million in 2025. The divergence between sales growth and operating profit fluctuations contributed to the observed margin compression.
- Key Observations
- The decline in operating profit margin, particularly the sharp drop in 2024, suggests potential increases in operating costs or pricing pressures that outpaced revenue growth. The recovery in 2025, while positive, did not fully restore the margin to its earlier levels. The consistent growth in sales, despite fluctuations in operating profit, indicates the company maintained its ability to generate revenue, but its efficiency in converting sales into operating profit varied over the period.
Further investigation into the underlying drivers of operating costs and revenue mix would be necessary to fully understand the observed trends and their implications.
Net Profit Margin
Lockheed Martin Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net profit margin = 100 × Net earnings ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited fluctuations over the five-year period. Initial values demonstrated a generally healthy profitability, followed by a period of decline and subsequent stabilization at a lower level.
- Overall Trend
- The net profit margin began at 9.42% in 2021, decreased to 8.69% in 2022, increased significantly to 10.24% in 2023, and then declined sharply to 7.51% in 2024. This downward trend continued into 2025, with the margin reaching 6.69%.
- Year-over-Year Changes
- From 2021 to 2022, a decrease of 0.73 percentage points was observed in the net profit margin. A substantial increase of 1.55 percentage points occurred between 2022 and 2023. However, the margin then experienced a significant drop of 2.73 percentage points from 2023 to 2024, and a further decrease of 0.82 percentage points from 2024 to 2025.
- Relationship to Sales
- Sales generally increased over the period, moving from US$67,044 million in 2021 to US$75,048 million in 2025. Despite this sales growth, the net profit margin decreased overall, indicating that the increases in sales did not translate proportionally into higher profits. The largest sales increase occurred between 2024 and 2025, but this was accompanied by the largest decrease in net profit margin.
- Net Earnings Impact
- Net earnings peaked at US$6,920 million in 2023, coinciding with the highest net profit margin. While net earnings remained relatively stable between 2024 and 2025, the net profit margin declined, suggesting that cost of goods sold and/or operating expenses increased at a faster rate than sales during those years.
The observed volatility in the net profit margin warrants further investigation to determine the underlying drivers of these changes, such as shifts in cost structure, pricing strategies, or product mix.
Return on Equity (ROE)
Lockheed Martin Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited considerable fluctuation over the five-year period. Net earnings and stockholders’ equity both influenced the observed trends in ROE, though not always in a directly proportional manner.
- Overall Trend
- ROE increased from 57.62% in 2021 to a peak of 101.24% in 2023, before declining to 74.65% in 2025. This indicates a period of strong profitability relative to equity, followed by a moderation in performance.
- 2021-2022
- From 2021 to 2022, ROE increased from 57.62% to 61.86%. This increase occurred despite a decrease in net earnings, from US$6,315 million to US$5,732 million. The primary driver of the ROE increase was a more substantial decrease in stockholders’ equity, falling from US$10,959 million to US$9,266 million.
- 2022-2023
- A significant increase in ROE was observed between 2022 and 2023, rising from 61.86% to 101.24%. This substantial improvement was driven by a combination of increased net earnings, which grew from US$5,732 million to US$6,920 million, and a considerable decrease in stockholders’ equity, declining from US$9,266 million to US$6,835 million. The decrease in equity had a more pronounced effect on the ROE calculation.
- 2023-2025
- From 2023 to 2025, ROE experienced a consistent decline, moving from 101.24% to 74.65%. While net earnings decreased from US$6,920 million to US$5,017 million, the decrease in ROE was partially offset by a slight increase in stockholders’ equity, rising from US$6,835 million to US$6,721 million. The net earnings decline contributed more significantly to the ROE reduction.
The volatility in ROE suggests sensitivity to changes in both profitability and equity levels. Further investigation into the factors driving the fluctuations in stockholders’ equity would be beneficial for a more comprehensive understanding of the ROE trends.
Return on Assets (ROA)
Lockheed Martin Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited fluctuating performance over the five-year period. Initial values demonstrated a generally strong ability to generate earnings from its asset base, followed by periods of decline and subsequent stabilization at a lower level.
- Overall Trend
- The ROA initially decreased from 12.41% in 2021 to 10.84% in 2022, representing a contraction in profitability relative to assets. A recovery was then observed in 2023, with the ROA increasing to 13.19%. However, this improvement was not sustained, as the ROA declined to 9.59% in 2024 and further to 8.38% in 2025.
- Net Earnings Impact
- Net earnings decreased from US$6,315 million in 2021 to US$5,732 million in 2022, contributing to the initial ROA decline. A subsequent increase in net earnings to US$6,920 million in 2023 drove the ROA upward. However, net earnings decreased in both 2024 (US$5,336 million) and 2025 (US$5,017 million), coinciding with the observed ROA declines during those periods.
- Asset Base Impact
- Total assets increased from US$50,873 million in 2021 to US$52,880 million in 2022, and then slightly decreased to US$52,456 million in 2023. Further asset growth occurred in 2024 (US$55,617 million) and 2025 (US$59,840 million). The continued expansion of the asset base, particularly in the latter years, likely contributed to the downward pressure on ROA, even with relatively stable net earnings.
The combined effect of fluctuating net earnings and a growing asset base resulted in a decreasing ROA trend from 2023 to 2025. While a peak in ROA was achieved in 2023, the subsequent declines suggest a diminishing efficiency in utilizing assets to generate profits.